[alleyb]

where do I start for what can become a very lengthy subject.
Any LIBOR based contract whether Short Sterling, Euribor, EuroDollars, EuroSwiss or 3 month Yen of which there are several genres are primarily the domain of the big banks but as previously posted really just about any type of institution is willing to be involved. This is still despite the electronicmogification of the marketplace still a product where the local (albeit upstairs now) is still a major player The volumes transacted are huge and the capability in the LIBORS to be able to trade the packs (groups of 4 quarterly contracts) to create yield curve and TED spread strategies adds to the appeal. The major influence in options these days is likely the hedge funds.
The purpose of the product is to offer a hedging capabilty against or for a directional move in short term interest rates but of course like any tradeable product the spec are just as likely to be involved as they try to anticipate the Central Bank's next move.